Pension firm cuts 900 jobs

AMP plans a split future

Insurance giant AMP is closing its UK pension company NPI to new clients and cutting 900 jobs as it struggles with growing losses.

The Australian company has now closed all of its British-based life services business to new clients.

The job cuts come on top of about 4,700 previously announced by AMP.

AMP's expansion into the UK financial services industry caused the company serious difficulties, as billions of dollars had to be pumped into the UK units to keep their reserves above the minimum capital requirement of the British industry regulator.

The UK operations, including NPI and Pearl, are due to be demerged from the profitable Australian and New Zealand operations.

Shares suffering

Chief Executive Andrew Mohl said he had considered selling, rationalising and restructuring NPI.

"After thorough consideration of all the options, we have decided that retaining the NPI book and closing it to new sales is in the best interests of both shareholders and customers," Mohl said in a statement to the Australian Stock Exchange.

"This solution maintains service to existing customers, secures assets under management for Henderson, provides scale to the life services business and minimises the cost of managing the NPI book."

Shares in the group, which have suffered badly in recent months, rose 0.58%, or three cents, to 5.17 Australian dollars on the move.

AMP shares have fallen from a high of 20 dollars since 2001.

If approved, two companies will be listed on the Australian Stock Exchange, with the Australian and New Zealand operations retaining the AMP name while the British units will be called Henderson.